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24 Jan 2009

Met Alan Thornett last year on the way to climate camp, an ex-car worker he is a committed ecosocialist, here are his thoughts on the car industry.

While governments across the world are pumping money into the banks, other sectors face a bleak future. Car production is particularly hit. Car sales are in meltdown all over the world. Almost all the major car companies have responded with reduced production, layoffs or sackings.

Redundancies already amount to hundreds of thousands of workers. It is an industry in long-term crisis and had over-capacity before the current crisis hit home. The industry is hit in four ways: · First the credit crunch itself. Credit, which is essential for a large proportion of sales has become far more difficult to get.· Rising unemployment, including in the high-paid white-collar sector, reduced earnings and job insecurity impact on car individual sales. Fleet sales to companies have also plummeted. · Third is the rising price of oil, and therefore of petrol and diesel. Although it has been dropping recently, peak oil means that the cheap fuel of the past is not going to return.· Fourth is the ecological crisis. There is a growing recognition of the impact of the car on global warming, and the urgent need for an alternative.

Additionally some manufacturers have found themselves making large expensive gas-guzzlers — including SUVs (sports utility vehicles) — with a complete inability to see the writing on the wall. Chrysler, General Motors, Porsche, Volvo (part of Ford), Jaguar Land Rover (now part of Tata) and BMW are all in this category.

The centre of the crisis is in the USA. Remarkably, it became clear last year that the icons of US car manufacture in the 20th century, General Motors and Chrysler, were struggling for survival. In December they announced that they would run out of cash by the end of the year. Fraught negotiations in Congress over a massive bail-out failed. They would go to the wall within weeks, with the potential loss of 3 million jobs in their own plants and backup industries. Bush was faced with a position where these two historic companies were likely to collapse before the end of his Presidency. He responded with a $14.4 billion loan package to keep them afloat until March, which would shunt the problem into the Obama era. In Europe a total of 2.1 million workers are directly involved in the car industry. This figure rises to 12 million when all car-related industries are included. Opel, the European subsidiary of General Motors, is slashing production, with many of its plants already shut down for extended periods. Cutbacks will affect its factories in Germany, Poland and Spain. Opel spokesman Andreas Krömer said “demand has hit rock bottom. We must react with an adjustment. We cannot build cars on a waste dump.”

In Britain most manufacturers face reduced sales. Workers in the Vauxhall (GM) plants are being urged to take a lengthy ‘sabbatical’. BMW in Cowley has its plant on extended shut-down and has laid off agency workers. Both Toyota and Honda are facing cuts. Industry minister Peter Mandelson is currently considering the government’s response. Like the banks, the car companies are now also demanding money from the state.

For socialists the first consideration in all this is the protection of jobs. The first people hit in nearly all the companies concerned are the agency or temporary workers, which they all now employ in large numbers. These can be sacked at a moment’s notice, and they don’t even count as redundancies or feature in the figures. The only feasible way to tackle this is nationalisation – not in the way British Leyland was ‘nationalised’ in 1968 through a majority government share-holding (though that would be better than nothing) but full nationalisation with public control. Jobs could then be saved while the industry was restructured.

It is not enough, however, simply to change over to smaller cars in firms where SUVs and other gas-guzzlers are being produced. The nettle of alternative production has to be grasped: a changeover to the production of more useful vehicles such as public transport and public services vehicles, and beyond that to other commodities such as equipment for a renewable energy supply.

An important debate around this has been taking place in Sweden where Volvo has already announced thousands of redundancies in its cars division. Socialists who are trade union activists in the plants have initiated discussions and meetings about the future of the industry based on alternative production . We have to see this as the way forward for a sustainable industry.